Housing Prices May Rise Again
Written On November 16, 2017
According to CIBC Deputy Chief Economist, Benjamin Tal, Toronto and Vancouver housing prices are expected to increase again in the long run. Although action has been taken to cool the markets, demand still remains strong. “The level of activity is likely to stabilize and perhaps soften in the coming quarters as markets adjust to recent and upcoming regulatory changes,” he wrote. “But when the fog clears, it will become evident that the long-term trajectory of the market will show even tighter conditions.”
While the recently updated stress-test requirements have made it more difficult to qualify for new mortgages, buyers are finding methods to get around the policy changes. For example, 10% of new mortgages in Ontario are now being provided by private lenders, a record high. “In the past, borrowers have seen tremendous ability to adjust to new situations and we doubt that things will be different this time,” says Mr. Tal. He expects demand to drop 5-7% in the short term before rebounding.
Mr. Tal will be releasing a detailed report on Tuesday, November 21, 2017.
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